This study aimed to synthesize the cellulose-modified material [potassium carboxymethylcellulose (CMC-K)] based on wheat straw from straw cellulose by alkalization and etherification so as to enhance the use of waste straw and improve water and fertilizer efficiency. Potassium was introduced through the carboxymethylation of cellulose to supply nutrients to crops. Moreover, the order of influential factors on the water absorption property was determined by an orthogonal experiment. The results showed that the highest water absorbency of 196.2 g/g was achieved for the conditions of 1.5:1 potassium hydroxide to cellulose, 1.5:1 chloroacetic acid to cellulose, 50% potassium hydroxide, and 80% chloroacetic acid. The CMC-K was characterized by Fourier-transform infrared, x-ray diffraction, and scanning electron microscopy techniques, and the results indicated that the product exhibited excellent water-retention ability in the soil and reduced infiltration. The agricultural application of CMC-K promoted the growth indexes of wheat, which improved wheat yields. Moreover, it also increased total nitrogen, ammonium nitrogen, total potassium, and available potassium. The fertilizer efficiency and water-retention behavior of CMC-K encouraged its use as a safe water- and fertilizer-retaining agent and as a soil conditioner in agricultural applications.